FES BRIEFING IRELAND Trade Union Monitor May 2020 POLITICAL, ECONOMIC AND SOCIAL FRAMEWORK POLITICAL CONTEXT As in most of Europe, the Irish political framework has been somewhat volatile over the past decade. However, the form this has taken is slightly different to many other countries. Ire­land was one of the countries hit hardest by the financial cri­sis post-2008, following a collapse in the banking and con­struction sectors, and required a ›bail-out‹ from the IMF-ECB­European Commission(the ›Troika‹). The general election of 2011 resulted in huge losses for the incumbent Fianna Fáil party, traditionally the largest political party in the country. The new Government, a coalition of Fine Gael(traditionally the second largest party) and the Labour Party(the ›third‹ tra­ditional force in Irish politics), was tasked with implementing most of the austerity agenda on which the financial support package from the Troika was contingent. This involved large cuts to public spending and social security, and significant wage reductions in the public sector. After recording real Gross Domestic Product(GDP) growth of more than 5 % in 2007, in 2009, real GDP in Ireland shrank by the same figure. The unemployment rate rocketed from under 5 % in January 2007 to more than 15 % by January 2012. Economic recovery, however, was swift. By the time of the election of 2016, Ire­land had exited the EU-IMF programme, unemployment had declined to under 8 %, the annual GDP growth rate was over 9 %, and the public finances were comfortably meeting EU budgetary targets. The 2016 election produced no clear majority for any party, or coalition grouping. The Labour Party was the main loser, seeing a huge drop in support, as voters seemed to blame it for the effects of austerity. Fine Gael formed a minority gov­ernment(supported by some independent, i. e. non-party affiliated, deputies, and an agreement from the rival Fianna Fáil party to support it from the opposition benches). From 2016 until the outbreak of the Covid-19 pandemic, the Irish politics were almost completely dominated by Brexit. As the country most directly affected by the UK vote to leave the EU(politically, economically, and culturally), the Brexit pro­cess(and the turmoil in UK politics) dominated news bulle­tins for more than three years. While the Irish government was widely praised at home for its handling of the Brexit process, and the economy continued to improve(unemploy­ment dropped below 5 % in early 2020), the general elec­tion of February 2020 produced a new shock as the left-lean­ing Sinn Féin(a political party with traditional ties to the Irish Republican Army) won a record number of seats, resulting in, effectively, a three way-tie between the traditional(cen­trist / centre right) parties of Fianna Fáil and Fine Gael, and Sinn Féin(the Labour Party secured under 5% of the vote). The surge in Sinn Féin support seems attributable to voter frustration about three key policy areas: health, housing, and homelessness; in all areas, Sinn Féin had advocated a more interventionist, State-led approach. The stalemate has resulted in an inability of any parties to form a coalition gov­ernment. The outbreak of the Covid-19 pandemic has now left the outgoing government in charge in a ›caretaker‹ ca­pacity. Thus, Ireland has gone from economic boom(2000–2007) to economic collapse(2008–2015), to economic recovery(2016– 2020), to economic uncertainty(Brexit / Covid-19). It is note­worthy that there has been no support for any political parties espousing a far-right agenda; notably, it is widely felt that the outcome of the 2020 election, in fact, reflected an increase in support for the left. ECONOMIC AND SOCIAL SITUATION As noted above, the economic situation in Ireland has been extremely volatile over the past decade. Although the economy, and public finances, were in a strong position in early 2020(low unemployment, strong economic growth), many threats were present. Prior to the Covid-19 outbreak, the biggest fears revolved around the possible impact of a ›no deal‹ Brexit. The effects of the UK failing to reach an agreement with the EU are difficult to quantify, of course, but would almost certainly be hugely negative for Ireland. 1